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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15202
Experience:  15years with H & R Block. Divisional leader, Instructor
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My wife received a gift in 2012 from her mother of shares in

Resolved Question:

My wife received a gift in 2012 from her mother of shares in the family farm S corp valued at about $6000 at the time of the gift. Later in the year, her mother died, and my wife sold the shares back to the family farm corp for $10,000. Yep, Iowa farm land prices have gone crazy!

Is there anyway to avoid paying capital gains tax on the $4000 gain? I do not see that any of the exclusions apply.
Submitted: 4 years ago.
Category: Tax
Expert:  Robin D. replied 4 years ago.

Robin D :

Hello and thank you for using Just Answer,
You are correct that there are no exclusions for the capital gains tax. The basis of stocks or bonds you buy is generally the purchase price plus any costs of purchase, such as commissions and recording or transfer fees. If you get stocks or bonds other than by purchase, your basis is usually determined by the fair market value (FMV) or the previous owner's adjusted basis of the stock.
To figure the basis of property you receive as a gift, you must know its adjusted basis to the donor just before it was given to you, its FMV at the time it was given to you, and any gift tax paid on it.

If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. Your basis for figuring gain is the same as the donor's adjusted basis plus or minus any required adjustment to basis while you held the property.
Please make sure you correctly apply the basis for calculating gain or loss on the property.

Robin D :

Please let me know if you need clarification. Thank you

Robin D. and other Tax Specialists are ready to help you
Customer: replied 4 years ago.
Thanks Robin. It was worth the cost just so I could be sure I was not missing anything.
Expert:  Robin D. replied 4 years ago.
Your positive rating is always thanks enough and I am so glad to have assisted you..

If you could also participate in the very short survey that Just Answer will send you by e-mail I would appreciate that very much.
I really enjoyed working with you – please feel free to request me again when you come back to ask another question.

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